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U.S. District Judge Stephen Wilson's Injunction

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U.S. District Judge Stephen Wilson's Injunction Case 2:06-cv-05578-SVW-JC Document 421 Filed 03/23/10 Page 1 of 15 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 CENTRAL DISTRICT OF CALIFORNIA 9 10 COLUMBIA PICTURES INDUSTRIES, ) CV 06-5578 SVW (JCx) 11 INC., et al., ) ) ORDER RE: PLAINTIFFS’ MOTION 12 Plaintiffs, ) FOR PERMANENT INJUNCTION [395] ) 13 v. ) ) 14 GARY FUNG, et al., ) ) 15 Defendants. ) ) 16 17 18 19 20 21 22 23 24 25 26 As stated at the March 22, 2010 hearing, the Court’s proposed 27 deletions and additions are contained herein. The parties’ responses 28 Case 2:06-cv-05578-SVW-JC Document 421 Filed 03/23/10 Page 2 of 15 1 to the Court’s alterations — and only the Court’s alterations — shall 2 be filed according to the following schedule: 3 -Defendants’ response of no more than eight pages: March 29, 2010; 4 -Plaintiffs’ reply of no more than eight pages: April 5, 2010; 5 -Defendants’ sur-reply of no more than five pages: April 12, 2010. 6 Upon receiving the parties’ briefing, the Court will issue such further 7 orders as are necessary. 8 The Court’s proposed additions are highlighted in UNDERLINED BOLD 9 and deletions in strike-through text. 10 /// 11 /// 12 /// 13 On December 21, 2009, the Court granted Plaintiffs’ Motion for 14 Summary Judgment on Liability, Docket # 391 (the “Order”), finding that 15 Defendants Gary Fung and Isohunt Web Technologies, Inc. (collectively, 16 “Defendants”) induced infringement of Plaintiffs’ copyrights in 17 violation of United States copyright law. See Metro-Goldwyn-Mayer 18 Studios, Inc. v. Grokster, 545 U.S. 913, 125 S. Ct. 2764, 162 L. Ed. 2d 19 781 (2005). The Court found that “evidence of Defendants’ intent to 20 induce infringement is overwhelming and beyond reasonable dispute,” 21 Order at 25, and therefore that “Defendants’ inducement liability is 22 overwhelmingly clear,” id. at 15. On the issue of a permanent 23 injunction, the Court has considered the briefs filed by the parties 24 and the argument presented at the hearing on this matter. Based on the 25 foregoing and all matters of record in this action, pursuant to Federal 26 Rule of Civil Procedure 65 and 17 U.S.C. § 502, the Court enters a 27 28 2 Case 2:06-cv-05578-SVW-JC Document 421 Filed 03/23/10 Page 3 of 15 1 Permanent Injunction in favor of Plaintiffs and against Defendants in 2 accordance with the terms contained herein. 3 The Court concludes that a permanent injunction should issue to 4 restrain further infringement of Plaintiffs’ copyrights. Plaintiffs 5 have satisfied their burden under eBay Inc. v. MercExchange, L.L.C., 6 547 U.S. 388, 126 S. Ct. 1837, 164 L. Ed. 2d 641 (2006), “(1) that 7 [they have] suffered an irreparable injury; (2) that remedies available 8 at law, such as monetary damages, are inadequate to compensate for that 9 injury; (3) that, considering the balance of hardships between the 10 plaintiff[s] and defendant[s], a remedy in equity is warranted; and (4) 11 that the public interest would not be disserved by a permanent 12 injunction.” Id. at 391. 13 Plaintiffs have demonstrated that they have suffered irreparable 14 harm, and would suffer further irreparable harm from Defendants’ 15 continued infringement, in three independent ways. First, given the 16 staggering volume of infringement of Plaintiffs’ copyrights, it is 17 extremely unlikely that Defendants will be able fully to compensate 18 Plaintiffs monetarily for the infringements Defendants have induced in 19 the past, or the infringements they could induce in the future. Metro- 20 Goldwyn-Mayer Studios, Inc. v. Grokster, 518 F. Supp. 2d 1197, 1217 21 (C.D. Cal. 2007) (“Grokster V”). Second, given the way in which 22 Defendants’ system works, when Defendants’ end-users download one of 23 Plaintiffs’ works, the end-users automatically and simultaneously 24 further distribute the work to innumerable others as a required part of 25 the download process; additionally, at the conclusion of the download, 26 Defendants’ end-users obtain an unprotected digital copy of Plaintiffs’ 27 28 3 Case 2:06-cv-05578-SVW-JC Document 421 Filed 03/23/10 Page 4 of 15 1 work that those end-users can further distribute indefinitely at will.1 2 Thus, when Defendants induce infringement, “Plaintiffs’ copyrighted 3 works can be unstoppably and near-instantaneously infringed throughout 4 the computer-literate world with the files obtained by [Defendants’] 5 end-users. Plaintiffs’ power to control their rights has been so 6 compromised by the means through which [Defendants] encouraged end- 7 users to infringe (digital files plus the internet) that the inducement 8 amounts to irreparable harm.” Id. at 1218-19. Third, it is axiomatic 9 that the availability of free infringing copies of Plaintiffs’ works 10 through Defendants’ websites irreparably undermines the growing 11 legitimate market for consumers to purchase access to the same works. 12 E.g., Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 13 928-29, 125 S. Ct. 2764, 162 L. Ed. 2d 781 (2005) (“digital 14 distribution of copyrighted material threatens copyright holders as 15 never before, because every copy is identical to the original, copying 16 is easy, and many people (especially the young) use file-sharing 17 software to download copyrighted works”); A&M Records, Inc. v. Napster, 18 Inc., 239 F.3d 1004, 1017 (9th Cir. 2001) (citing “Napster’s 19 deleterious effect on the present and future digital download market”). 20 21 1 The Court notes that Defendants argue that the Supreme Court’s holding in Grokster was limited solely to “devices” that induce 22 infringement. Defendants further argue that they are immune from an 23 injunction against their “activities.” (Opp. at 6-7, 19.) Defendants’ argument lacks merit. Nothing in Grokster requires that 24 there be a “device”; the central inquiry is based on the defendants’ “purposeful, culpable expression and conduct.” Grokster, 545 U.S. at 25 937. The Supreme Court’s holding in Grokster was not limited solely to “devices.” The Supreme Court used terms such as “device,” 26 “product,” and “tool” interchangeably. Id. at 940 n.13. In 27 addition, the clear import of the Supreme Court’s opinion was that a defendant may be secondarily liable for his conduct and activities 28 wholly separate and apart from any products, devices, or tools. 4 Case 2:06-cv-05578-SVW-JC Document 421 Filed 03/23/10 Page 5 of 15 1 For many of the same reasons, Plaintiffs have demonstrated that 2 they do not have an adequate remedy at law for the harm that has been 3 or could be caused by Defendants’ infringement. “‘Damages are no 4 remedy at all if they cannot be collected.’” Grokster V, 518 F. Supp. 5 2d at 1219 (quoting Douglas Laycock, The Death of the Irreparable 6 Injury Rule, 103 Harv. L. Rev. 687, 716 (1990)). Likewise, “[a] legal 7 remedy is inadequate if it would require a multiplicity of suits.” Id. 8 at 1220 (quoting Laycock, 103 Harv. L. Rev. at 714) (alteration in 9 original). Here, especially given the multiplicity of infringements of 10 Plaintiffs’ works caused by a single user downloading a single dot- 11 torrent file from Defendants’ sites, see Order at 6-7, it would be 12 untenable for Plaintiffs to track and proceed against each infringing 13 end-user. Additionally, Plaintiffs would not be able to recover 14 damages from Defendants for the inevitable derivative infringements 15 that would occur outside Defendants’ websites when copyrighted content 16 acquired as a result of Defendants’ inducement is further distributed 17 by Defendants’ users. These further infringements are a continuing 18 threat, making remedies at law insufficient to compensate for 19 Plaintiffs’ injuries. The only realistic method for remedying such 20 future harm from Defendants’ inducement is by way of a permanent 21 injunction. Grokster V, 518 F. Supp. 2d at 1220. 22 The balance of hardships between Defendants and Plaintiffs also 23 warrants the issuance of a permanent injunction. As described, absent 24 an injunction, Plaintiffs would suffer a severe hardship as a result of 25 Defendants’ inducement of infringement. The injunction being ordered 26 by the Court would not pose a corresponding hardship on Defendants. 27 The Court has already found that Defendants’ websites are used 28 5 Case 2:06-cv-05578-SVW-JC Document 421 Filed 03/23/10 Page 6 of 15 1 overwhelmingly for copyright infringement, with upwards of 95% of all 2 dot-torrent files downloaded from Defendants’ websites corresponding to 3 works that are infringing or at least highly likely to be infringing. 4 Liability Order at 10-11. Obviously, the harm to Defendants from no 5 longer being able to exploit and profit from that infringement is not a 6 hardship the Court need consider. See Cadence Design Sys., Inc. v. 7 Avant! Corp., 125 F.3d 824, 829 (9th Cir. 1997) (defendant “cannot 8 complain of the harm that will befall it when properly forced to desist 9 from its infringing activities” (citation and internal quotation marks 10 omitted)). Beyond that, the Court’s injunction is limited to 11 Plaintiffs’ copyrights and will not substantially interfere with any 12 claimed non-infringing aspects of Defendants’ system. 13 The Court is further persuaded that Defendants would likely 14 continue to induce infringement in the absence of a permanent 15 injunction. As this Court observed in Grokster: 16 [A] successful inducer will sometimes have no need to repeat the 17 infringing message ad infinitum.
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